A day after Punjab National Bank (PNB) disclosed a $1.77-billion fraud in a regulatory filing, causing the bank\u2019s stock to lose a fifth of its market value and triggering some concerns whether such incidents might have occurred elsewhere in the banking system as well, the finance ministry and the state-run bank itself tried to soothe nerves. And the law enforcement agencies were quick on their toes too. PNB said it will honour all \u201cbona fide commitments\u201d on the letters of undertaking (LoUs) illegally issued by a Mumbai branch allegedly to firms controlled by billionaire jewellers Nirav Modi and Mehul Choksi, causing the mammoth fraud. However, the bank\u2019s managing director Sunil Mehta stopped short of owning up to the entire liability until investigations by various agencies conclusively suggest so. In a tweet, the Enforcement Directorate said it searched \u201c17 premises across India of Nirav Modi & Geetanjali Gems in case related to fraud in PNB\u201d on Thursday and seized \u201cstocks of gold, diamond & precious stones worth Rs 5100 crore\u201d. The raids, PTI reported, came after the agency filed a `280-crore money-laundering case against Modi, his wife Ami, brother Nishal and business partner Mehul Choksi on Wednesday, following a complaint by PNB. Stressing that the culprits in the PNB fraud case won\u2019t be spared, financial services secretary Rajeev Kumar separately said the bank will make the required provisioning for any liability and that it has \u201csufficient\u201d funds for it. \u201cWhole lot of assets will be recovered. Nobody will be spared,\u201d Kumar said. For its part, the finance ministry believes the fraud doesn\u2019t pose broader systemic risks; still, the ministry is monitoring the development closely, a senior official told FE. Mehta too said the fraud was confined to only one branch and is not widespread. Under relentless attack from a united Opposition over the fraud at the second largest state-run lender, government managers asserted that no one, however high and mighty, will be spared if found to be complicit in it and investigations that it will be carried out at a brisk pace. Union minister and senior BJP leader Ravi Shankar Prasad said: \u201cI wish to make it very clear on the behalf of the government that no one, who has sought to derail ordinary banking system, shall be spared, regardless of any individual's stature and status.\u201d In a cautionary letter to chiefs of 30-odd banks, PNB has hinted other banks may have been lax in their due diligence, as stipulated by the central bank, while entertaining these fake LoUs. Mehta said PNB\u2019s exposure to various firms controlled by Modi and Choksi would be roughly Rs 1,700 crore, excluding the LoUs. Choksi has denied any wrongdoing by him or his company. \u201cIf the investigation process says it is (entirely) our liability, then we will accept it,\u201d Mehta told reporters. These LoUs helped these companies raise buyer\u2019s credit from international branches of other banks, which feel PNB must honour its LoUs based on which they lent to the firms related to Modi. PNB hasn\u2019t yet received any directive from the Reserve Bank of India (RBI) on its share of liabilities, Mehta said, adding, however, that it will go by any directive from the central bank on the extent of liabilities. The fraud couldn't have come at a worse time as the lender is still trying to trim its gross non-performing assets from as much as 12.11% of gross advances. Its total provisions (other than tax) and contingencies made during the third quarter of 2017-18 climbed 74% to Rs 4,466.68 crore. Its net profit in the first three quarters of this fiscal stood at Rs 1,134 crore, up Rs 1,063 crore from a year before. This means its finances would be badly hit if it is to make provisions for the liabilities from this fraud. Mehta said the fake LoUs were being issued since 2011 and the bank first detected the fraud on its own in the third week of January. \u201cWe approached CBI on January 29 this year and immediately filed an FIR,\u201d he said. \u201cWe are in the recovery mode and looking to protect the financial interest of all lenders.\u201d Mehta said Modi had conveyed his willingness to pay but the bank has asked him to come up with a concrete action plan. \u201cHe (Modi) had last week sent us an email offering to repay the dues. We have not accepted the vague offers. We have asked him for a concrete repayment plan,\u201d Mehta said. Asked how such fraudulent activities escaped the monitoring of the bank management and auditors, Mehta said these LoUs were issued using the SWIFT interbank messaging system, without making corresponding entries in the bank\u2019s own books, thus, preventing any oversight. Since the fraud has been detected by the bank itself, there may not be any requirement for a forensic audit. However, should the bank feel the requirement of it, it may opt for one. ED sleuths swooped down on at least 10 premises linked to the case early this morning. They searched Modi's residence in Kurla, jewellery boutique in Kala Ghoda area, three company offices in Bandra and Lower Parel in Mumbai, three premises in Surat in Gujarat and Modi's showrooms in Chanakyapuri and Defence Colony in Delhi.